© Reuters.Apple (AAPL) shares drop 3% as report demand weakensSenad Karametovich
Apple (NASDAQ:) shares fell more than 3% in trading on Tuesday. After Nikkei Asia reported Cupertino he informed suppliers that the tech giant expects demand to weaken in the first quarter for some of its hardware products.
Apple has reportedly instructed its Asian-based suppliers to reduce shipments of AirPods, Apple Watch and MacBook components.
An Apple supplier manager told Nikkei Asia: “China’s supply chains are still grappling with the recent drastic policy shift that has led to labor shortages due to the rapid surge in the novel coronavirus.”
Reuters reported today that Apple supplier Foxconn’s main iPhone factory in Zhengzhou has returned to near full capacity after weeks of severe disruption.
The COVID-19 outbreak in China, which began in late October, has caused Foxconn’s labor shortages, prompting major suppliers to offer employee bonuses of up to RMB 14,000 ($2,013). I also saw some employees going on strike because of payment issues.
Apple’s stock price was downgraded in BNP Paribas’ exanes today, sharply lowering its EPS and iPhone shipment forecasts, leading to a lower price target as well. The broker now expects Apple to ship his 224 million iPhones in 2023.
